Cornered by Russia, Ukraine eyes Turkmen gas

Ukraine, embittered by Russia's unwillingness to cut prices for its gas, said on Monday, Sept. 12 it would try to resume imports of the fuel from Turkmenistan.

Ukraine is struggling to pay high gas prices under a 2009 contract with Russia and has asked for a reduction in price. Russia initially suggested concessions were possible, but insisted that Ukraine sell Moscow its pipeline grid or join a customs union of Russia, Kazakhstan and Belarus in return.

Kiev has sought ways to break free of its dependence on Russian gas, but without significant reserves of its own, it must seek supplies elsewhere in the region if it is to wean itself off of Russian supplies.

Ukrainian President Viktor Yanukovich has threatened that Kiev could take Moscow to court in a bid to review the gas deal.

On Monday, he arrived in the reclusive Central Asian nation of Turkmenistan, from where Ukraine had been buying natural gas directly until 2003. After that and until the 2009 gas deal with Moscow, Turkmen gas was sold to Kiev via intermediaries.

"It is in Ukraine's interests to resume our full-scale cooperation in the oil and gas sector," Yanukovich told reporters in the Turkmen capital Ashgabat after holding talks with his Turkmen counterpart Kurbanguly Berdymukhamedov.

"We will work more actively on defining our goals and concrete projects, as well on the ways of implementing them, including the neighbouring countries, through which energy resources are transported."

Yanukovich did not elaborate.

Berdymukhamedov, whose word is final in his 5-million nation which holds the world's fourth-largest natural gas reserves, said: "We have at our disposal whatever is needed to bring our cooperation to a new level." He also gave no further detail.

Dependence on Russia

Energy-starved Ukraine, which buys up to 60 percent of the natural gas it consumes, has to import the fuel across Russia via the pipeline network of Russian gas export monopoly Gazprom.

Besides buying gas from Russia, Ukraine also transits it further to Europe, and the row between Kiev and Moscow has already evoked memories of similar disputes in recent years which cut gas supplies to European consumers in the winter.

Turkmenistan, Central Asia's largest producer and exporter of natural gas, is for its part keen to lessen its dependence on gas exports to Russia, supplies to which fell sharply in 2009 due to the global crisis.

In April 2009, Gazprom halted Turkmen gas imports until the start of 2010 after a pipeline blast disrupted flows.

The European Union said on Monday it had agreed to negotiate a treaty with Azerbaijan and Turkmenistan to bring their natural gas to Europe across the Caspian Sea.

The proposed pipeline, part of a planned corridor of links known as the Southern Corridor, is designed to reduce EU dependence on Russian gas imports.

Tring to boost gas exports and bypass Russia, Turkmenistan has boosted supplies to next-door Iran, launched a pipeline to China and made progress on the planned TAPI pipeline designed to run to Pakistan and further to India via Afghanistan.